The megasquirt is definately cheaper than any other option if you're willing to root around getting accessories on the cheap. I am out no more than $500 for my complete setup, which was MUCH less than any of the other options.
I don't feel like buying a kit violates the spirit of the project. You can still build the whole thing yourself, but there are many people that would rather spend their time tinkering with the software aspect than soldering a board together. Also - the megasquirt is the easiest kit I've EVER put together. It was easier than some of IKEA's products to get together, thanks to very clear documentation - so I don't think I agree that putting an MS together is actually ALL that much of an achievement. I still enjoy the fact that I did put mine together; but I didn't design the PCB, or even source the components. The DIY-WB was much harder to figure out - and I don't feel as good about it as I do about the megasquirt.
The big problems megasquirt has are around wiring harnesses and weatherproofing, IMHO - and these are the things that require the individual to step into the fold and do some engineering.
What I don't really understand though is why Kit decided to build the whole thing from scratch. It seems like he could have applied his talents to making a more polished megasquirt kit that had the typeIV wiring harness and some improved UI features (perhaps eliminating some of the bells and whistles), and would have been able to get further faster by leveraging the community, and the community could even help by keeping development going whilst Kit has been absent.
As for starting a company to compete with SDS and Megasquirt - it seems that this would be a very difficult proposition. I doubt that the market is big enough, and he will need a market differentiator... It either needs to be cheaper (very hard given megasquirt's cost effectiveness) - demonstrabily superior (one guy is going to out-engineer several established products and a very active user community?) - or perhaps more reliable, but this too would require a lot of testing and ... expense.
Is Megasquirt "Cheap" - in the quality and low craftsmanship sense of the word? I suspect that the reason for the other commercial systems' expense is that somebody is trying to make a living by producing them. Keeping 4 or 5 people employed with health insurance and working full time on product development, manufacturing, documentation, support, payroll, etc, requires some significant cashflow. The genius of Megasquirt is that the principal guys working on it don't really have any of these problems. It's an "experimental" kit, so documentation is optional and is often filled in by the community, and the same goes for the management software and the support. Given it's experimental status, it's hard to argue that there should be better support, whereas the customer who layed out a couple of grand expects somone to be on the end of a phone, solving their problem.
The Megasquirt is quite mature at this point, having been around for at least 4 years and running on many cars - things that broke got re-engineered until they worked well enough to be used on a daily basis. I suspect there are still lingering problems with it that won't become clear for perhaps many years. It's hard to say weather or not those problems are really there, or if they are there in the commercial systems.
This all makes me very skeptical of the claim that one system is better than the others. I haven't seen an argument yet that has gone to the trouble of laying out exactly what one system does better than the others that is measurable and beyond personal preference.
So I think it's hard to say that one system is "better" than the other. Like many things - I think it's just down to the preferences of the individual at the wheel, and what their definition of better is. This is of course fine - if we were all the same, life would be terribly boring!
This is of course my opinion, and in some cases just speculation, so your milage will vary depending on your target AFR table, and other factors.